China-Backed Sunshine Oilsands Pulls $325 Million BondCecile Gutscher
Sunshine Oilsands Ltd., a Canadian energy producer backed by Chinese investors, is abandoning a plan to issue a $325 million bond after failing to attract buyers, two people with direct knowledge of the deal said.
Sunshine will pursue alternative financing led by Imperial Capital Group Inc., Scotia Capital Inc. and Morgan Stanley, the people said.
Calgary-based Sunshine, backed by China Life Insurance Group and China Investment Corp. among its largest shareholders, said May 22 it was seeking a $325 million bond in the U.S. and Hong Kong to fund development of its West Ells project in the Athabasca oil sands region in Alberta.
Sunshine’s value in the stock market has plunged to C$447 million ($419 million) amid delays in financing the West Ells project. Sunshine fell 4.2 percent to 11.5 cents at 11:53 a.m. in Toronto, and has dropped 49 percent this year.
Interim Chief Executive Officer David Sealock didn’t immediately respond to a voice mail left at his office seeking comment.
Songning Shen and Wazir Chand Seth resigned from the board, the company said July 6. Shen was previously co-chairman of Sunshine.
Sunshine arranged $70 million in equity financing last month while it was pitching the bond sale. The company is targeting initial production of 5,000 barrels per day using steam to extract trapped reserves of bitumen at West Ells.